Thailand’s cabinet has approved extending the 7% VAT rate for another two years. The standard VAT rate in Thailand is 10%. VAT was due to revert to the standard rate on 30 September 2021, pending an extension.
Although the standard VAT rate is 10%, Thailand’s VAT has been set at 7% since the time of the 1997 Asian financial crisis. Cabinet has extended the lower rate a number of times.
Digital services companies: Note the VAT rate
Thailand’s VAT rate extends to companies operating outside of the country’s borders. Nonresident businesses that supply digital services to customers in Thailand are now subject to the Digital Services VAT, at the 7% VAT rate.
The VAT registration threshold for Thailand’s Digital Services VAT is 1.8 million Baht per year.
Thailand’s economy: Down but not out
The Thai economy grew more quickly than expected in Q2 2021. However, the Covid pandemic continues to pose a significant economic challenge. The current Covid outbreak comes as the country was hoping to open up the country to foreign tourists, a vital source of income.
The Bank of Thailand has kept interest rates low, at 0.5%, and the BOT governor called for robust fiscal policy to support employment.
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